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war can be carried on with the aid of bonds, it can,— leaving out of consideration what foreigners send us, with a sufficiently perfect taxing machinery, conceivably always and practically sometimes, be carried on without bonds. It is only a question of how to get hold of the means of producing powder and bullets. War was formerly carried on without bonds; they are a comparatively recent contrivance. Consumption can never anticipate future production for the nation as a whole taken by itself; it can only anticipate future ownership.

Consumption and Saving. It is difficult to say in practice at what point consumption should stop and saving begin, but the principle itself is clear. So much, and only so much, should be saved as will maintain a maximum final consumption over long periods of time. It is conceivable that the present generation might deny itself everything except the barest necessities and labor to increase the productive equipment to be used in the future; but the next generation could not pursue the same policy, for some one must consume the products of the factories built to-day, otherwise the building of them was wasted effort.

To provide for old age or for possible accident may be a sufficient motive for saving in some cases, but saving is stimulated when the goods saved will bring an increase. It is, therefore, necessary to an extensive saving that the conditions of profitable investment should be provided; and if wealth is to be widely diffused, opportunities for investment should be readily available. It is a perceived opportunity to make an investment with probability of increase which stimulates saving above everything else. Another important condition is security. If the investments of a country fluctuate between loss of principal and unreasonable profit, the condition is one to encourage speculation rather than saving. Among the institutions which encourage saving are private property, corporations, coöperative enterprises, savings banks, and insurance.

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Luxury. Luxury is the name of a vague something which society has always viewed with a sense of mingled tolerance and condemnation. In the first place, it is clear that people ordinarily consider as luxuries many things in themselves innocent and de

sirable, as silk dresses, jewels, pictures, etc. No one but an ascetic will condemn as wrong in themselves things that appeal to taste and finer appreciations, and yet we feel that the use of such things is often unjustifiable. Second, the popular idea of luxury recognizes à difference in persons. We cannot help condemning in one person what we approve in another. Third, we judge luxury differently at different times. There is a continual transfer of articles from the list of luxuries into that of comforts and necessities. This transfer is brought about by the consensus of social judgment, and is increasingly acquiesced in by all. So we see that the term "luxury" does not apply to goods of a certain character, but to certain goods in their relation to time and person. For the purpose of discussion, we shall define luxury simply as excessive consumption. But what determines whether consumption is excessive or not?

The answer to this question depends, first, upon our idea of right living, and second, upon our idea of a just distribution of wealth. The former question we shall not discuss. It is that of the simple life versus the complex and varied life, and may be left to the sociologists, philosophers, and moralists. But what is a just distribution of wealth? In the world's speculation upon this subject, three ideas stand out prominently: (1) equality, (2) product, (3) needs. Let us examine these three bases of distribution.

The ability of men to use wealth sanely is enormously unequal, and there is no probability that this inequality will soon be removed. To distribute wealth equally, therefore, would be to use goods where they satisfied trifling wants or none at all. But in addition to its wastefulness, an equal distribution is further objectionable because of the discouragement it might give to the energetic members of the community. Would a man continue to work hard if his lazy neighbor received as much as he? There is only one sense in which we must regard men as equal, and that is that the happiness of one is as important as the happiness of

another.

That wealth should be distributed according to what men produce is perhaps the most widely held idea at the present time,

sometimes on the ground that it is theirs by natural right, which is fallacious, and sometimes on the ground that such a method of distribution is a cure for laziness. There is, however, great difficulty in applying this test accurately under the complex conditions of modern industry. Who shall say what the president of a great life insurance society is producing? How many dollars' worth has a physician produced who has saved a man's life? However satisfactory the test of productivity may be in the case of a man who produces a pair of shoes with his own implements and labor, it fails at many points under modern industrial conditions, and its failure has become increasingly apparent with the growth of large-scale production and monopoly.

Those who are impressed with the difficulty of saying what a man has produced, suggest that we ascertain what he needs. This, it is true, is not capable of exact determination; but any wide departures from justice might be agreed upon by judicial inquiry. Needs are the basis of the distribution within the family. The solidarity of the family demands it, and this is but the epitome and type of the solidarity of society. It is unquestionably in the interest of society that those with the highest capacities should be allowed to attain the fullest development of all their powers, provided these powers are used in the service of humanity. What is necessary to make a man a good citizen? That, according to this third view, is the ultimate test of a just distribution.

It is not necessary for us to select as a practical programme any one of these tests and wholly reject the others. The first, equality, reminds us that the lowliest human being is to be looked upon as an end, not as a means to the happiness of others; the second is safe and convenient so far as it can be definitely applied; but the final test, so long as we are social beings, will always be that of needs, understanding by "needs," not what the individual asks for, but what is required for a full development of his powers.

While, then, justifiable consumption will, according to these principles, be exceedingly variable, can any one for a moment claim that such principles now govern consumption? Immense sums are squandered on passing caprices whose satisfaction cannot by any standard be considered necessary. On the other hand,

multitudes of fine natures with keen appreciations and large capacities for development and present enjoyment are left without the means for either. So long as these things exist, so long as a vast amount of the world's wealth is destroyed by vulgar and incompetent consumption which might impart satisfaction of a high order if consumed otherwise, and by others, the moral sense of the world will condemn luxury as a social wrong.

And what is the excuse for this abuse? Usually the simple fact of ownership. "It is ours," they say. But for what? Simply because the interests of production require capital to be massed under specialized control. There is no more reason why a millionaire should consume all the income he controls than there is why a philosopher or an artist should withhold from society the satisfactions afforded by his genius. A successful manufacturer once expressed the opinion that a man has the right to put down silk velvet on a muddy crossing to walk on if he is rich enough to afford it. When a man tramples in the mire the fruit of human industry, he tramples with it human rights and humanity, and he should expect humanity to avenge the affront. The right of private property, like other social institutions, is ever on trial. The obsolete objection is sometimes urged that luxury gives employment to labor. Does not philanthropic and productive expenditure do the same? But that is not the question. What comes of the employment? The payment of wages only helps men to get more of existing goods from other persons. That may be good for those workmen individually, but the only way to help society as a whole is to give men useful employment, to aid and encourage them to produce needed goods. Every employment of labor which encourages production of luxuries is a misdirection of social energy, an encouragement to society to spend its money for that which is not bread and its labor for that which satisfieth not.

Harmful Consumption. We have been careful to avoid the impression that luxury consists in the use of pernicious goods. It is a common query, "Why should I not have this if it does me no harm?" This we have tried to answer in the preceding paragraphs. A luxury may be a positive good in itself, a satisfaction

which society may well hope to make general, but it is a good which society cannot yet afford because other and greater wants are yet unsatisfied. But there is another kind of consumption which is objectionable in an entirely different way, not because it is excessive or premature, but because it is harmful in itself. Such are frequently drugs and alcoholic beverages. As we have said before, these wants are as economic as any other, and we have no intention of assuming the function of the physiologist or the moralist in enumerating the evils which come from the consumption of certain goods. But in one respect we have a distinct part in this discussion. All production is for the sake of man, and consumption is its final term. But in turn man is the principal factor in production, and as the consumption of certain goods affects him, the result is necessarily transmitted to the productive process. Now the consumption of certain goods clearly unfits men for efficient production, lessening bodily vigor, blunting the perception, and these goods the economist regards as harmful in the sense of being destructive of human energy.

Statistics of Consumption.-Instructive investigations have been made as to the relative importance of the leading items in the family budget. The late Ernst Engel, the former distinguished head of the Prussian Statistical Bureau, advanced the theory that it might be possible by a careful study of a sufficient number of family budgets for a period of years to indicate the broad changes. in consumption, and thus by a sort of social signal service to predict the coming of industrial storms. Nothing has been so far accomplished along this line, but Engel's tables are interesting. From Table I (page 118) he deduces the following four propositions :

First. That the greater the income, the smaller the relative percentage of outlay for subsistence.

Second. That the percentage of outlay for clothing is approximately the same, whatever the income.

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Third. That the percentage of outlay for lodging or rent, and for fuel and light, is invariably the same, whatever the income. Fourth. That as the income increases in amount the percentage of outlay for sundries becomes greater.

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